VIDEO: Sentech views OTT as opportunity for growth
While some in the industry have called for regulation of streaming and over-the-top (OTT) players, Sentech CEO Mlamli Booi says this will not prevent other players coming into the country.
Booi made the comments during a wide-ranging video interview with ITWeb TV, discussing Sentech’s business evolution, its intended merger with Broadband Infraco, content distribution, as well as future plans to beat load-shedding woes.
The video-streaming market has seen exponential growth in recent years, with platforms such as Netflix, Amazon Prime, Disney+, BritBox and Apple TV+ expanding their services to emerging markets like South Africa.
Locally, there are players like MultiChoice-owned Showmax, Video Play from Vodacom and eMedia Investments’ eVOD, and the public broadcaster last year launched its SABC Plus video-streaming offering.
However, all of this activity has rattled MultiChoice, which holds 98% of the local pay-TV market. It has been vocal about its grievances, calling for South African regulators to set comparable parameters for the international video-on-demand players.
Booi commented: “We’ve got competing OTT platforms in the country on the content side − namely Netflix, Showmax and Amazon [Prime] − and I’m sure there’ll be others coming because they see the potential in this market.
“Can you stop them? No, you shouldn’t even think of stopping them. Find a way of working together with them and partnering with them, if you’re a broadcaster. If you want to compete with them [then] compete, but you may want to collaborate with them as a broadcaster and figure out how to share in the provisioning of OTT services to consumers. If you do that, I think the level of success is going to be much higher.
“We can’t even think of using regulation and law to stop them as some people want…the regulator must do its job where there is a gap and I think they are doing their best under the current circumstances. You’re not going to stop OTTs from coming into the country.”
The Sentech boss noted the South African OTT services market is still maturing, largely due to the fact that OTT services are directly linked to availability and penetration of broadband.
“Anyone who says OTTs are going to replace traditional [broadcasting] next year, I don’t think they would have thought it through and considered the contributing factors. It’s only at the time when everyone has broadband and then you’ll have a bigger pool of viewers and customers who can access that service.”
According to Booi, OTT services might be viewed as a challenge to traditional broadcasting platforms, but Sentech views this as an opportunity for growth.
“It is not going to replace services that you deliver via satellite, which is one of the services that we deliver. You can deliver multiple channels by satellite.
“The latest technology, which is OTTs, makes it easier to do on-demand services, but as a broadcaster, I would never only use one service. I would look at multiple technologies and platforms, to be technology-agnostic. This is to say: I’m available on terrestrial TV, satellite and streaming, which is the over-the-top.
“Young folk don’t watch linear TV, sitting and waiting for the seven o’clock news; nobody does that anymore. As a broadcaster, you have to be on all platforms. That said, you cannot have OTTs without broadband access; those two are really cousins. One is a platform on which the other runs.
“The business of broadcasting is largely driven by the attractiveness of the content that you carry on the platform; it has nothing to do with the platform − whether it’s on satellite or terrestrial. If what you are providing is attractive, you’ll get the audience.”
Booi noted that Sentech, originally established as a signal distributor, has evolved over the years, expanding its offering to include wireless broadband services, an OTT service platform and managed infrastructure services.
“Internet connectivity is key; we saw the need for connectivity during the pandemic. Our role as Sentech is to provide universal access to not only content, but broadband. Because of our technology, which is satellite and wireless, we can provide broadband wireless internet services to the most remote areas because satellite knows no boundaries.
“We’re not calling ourselves a signal distributor anymore because technologies have grown; we have evolved as an entity from being a signal distributor to providing data centre services, for example. Our intention is to build capacity for data centres because we’ve got some capacity in our infrastructure. We are working on those services to build capacity for our customers, especially public sector customers.”
According to Booi, on the content side, the entity doesn’t have plans to provide business-to-consumer services, as it doesn’t have a licence to do so.
“The licence that we have is to be able to carry the licensees on our platform. The other licence that we have is providing broadband services. We can provide directly to you as an end-user by installing a satellite terminal which will provide broadband at your own premises.”
Sentech is one of the entities mandated with the national rollout of government’s ambitious SA Connect broadband project.
Asked whether SA will achieve 100% broadband connectivity, Booi said maybe 99.99%, noting there’ll always be room for improvement. “Ideally, we want to cover 100% of the population. Will there ever be time for us to do so? I believe in the future that might happen.
“We should be able to say we can achieve 100% of the schools, there’s no excuse. We must be able to say we’ll achieve 100% of the clinics and 100% of all the government buildings. I can see this happening and it should happen in the next five years.”
Sentech has been vocal about the hefty price it pays to keep some of its sites operational during rolling blackouts. In March, the organisation revealed it had witnessed a steep rise in diesel costs between 2022 and 2023, spending more than R2 million per month.
Booi noted Sentech has committed to deploy green energy solutions at some of its 300-plus sites nationally, as part of its contribution to a clean environment. He revealed this has started with the Sentech head office, where a solar plant has been deployed. The next phase will be solar energy storage.
“Our target is to do this at 19 of our transmitter sites, especially the major sites, and we continue to do so. Our sites are also well located, which makes it possible to place a wind-generated power source on those sites. For now, we are looking at deploying solar on our transmitter sites.
“Because of the high power demand at our transmitter sites, we can’t replace the energy requirement from there with power from solar – we’d need a very big solar farm to do that. So, we still have that hybrid between our solar and the energy from Eskom.”
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